Houston Strategies

Thursday, April 30, 2009

Houston better than Portland

Long-time readers of my blog know why I couldn't resist a chance to use that headline... ;-)

A hearty congratulations to the Rockets. The last time they made the second round of the playoffs was 1997. Now it's time to shock Kobe and the Lakers. BTW, does anybody else find it annoying that we get stuck with the top-seeded Lakers instead of the lower-seeded Mavericks? What's up with that?

A poignant last post on Houston

It happened like this: Many years ago I was tripping on the smart-growth kool-aid. I got accepted to an engineering school in Portland, Oregon, because Portland was just the PERFECT place for the budding new urbanist. And it took me about a year to realize that the biggest thing preventing all the small-scale mixed-use locally sustainable goodness was the exact same planning and zoning bureaucracy that was supposed to bring about the enlightened tomorrow. The planning process was, in itself, the primary problem. I could’ve stayed - an agent provacateur, throwing rocks at the PDX self-worship-mobile (which happens to look suspiciously like a Siemens LRV). But I’m a firm believer in the principle that every city tends to become more like itself, and I figured that if the Portlanders were happy with their Portland, then they should have it.

So I did the only logical thing. I moved to Houston, Texas.

...

This is a special place. It’s a special city, in a special state. I could say that I hope Houston “never changes,” but it’d be sure to be misconstrued, because part of what makes Houston so endearing is its constant change. I haven’t yet woken up to a Montrose morning that doesn’t include multiple cranes on the horizon. The skyline changes yearly, the streetscape monthly. Some of my favorite restaurants have moved. And even if I only have to be away for a summer, or for a year, I fully expect that when I return there’ll be new things to surprise and delight.

In the meantime, knowing that I’m going to be spirited away makes each moment slightly more poignant. Yesterday I was headed east on Blodgett. Unbound, small-scale capitalism, buildings in all states of repair under a thicket of electrical wires, the architecture of laissez-faire. Cut south to MacGregor and admire misty towers of glass rising above the lush, bayouside vegetation. Houston is the perfect Radiant City - witness our towers and 18-lane motorways. Houston is the perfect New Urban City - witness our endless small-scale neighborhood businesses tucked among the houses and garden apartments of neighborhoods whose deed restrictions long ago expired. Houston is just a damned good place to live, period.

...In the meantime, please don’t vote for that architect guy for Mayor. I wanna build a funky house when I come back, and I don’t wanna deal with some urban sub-district framework planning neighborhood design review board telling me about allowable roof pitches and minimum window coverages. Ick. Tell your kids to just say no to form-based codes.

There is a lot here, including a lot I agree with, but in the interest of brevity, I will focus on areas where we disagree, which are substantial. His biases show clearly throughout the article. Just one example: he sees the decline of the industrial Midwest, and also talks about the critical importance of creativity, innovation, and patents - yet his data maps show incredible concentrations of patent activity in the Midwest, actually looming over all other regions of the country. These two things do not square, yet no explanation is found. Clearly that critical-mass creative cluster is not able to save itself from the powerful forces of the internet and globalization, yet he claims that similar clusters in finance, media, entertainment, and tech in much higher-cost NYC and CA are safe. Nothing to see here, NY and CA, just move on along and don't worry yourselves...

"...New York is more of a mecca for fashion designers, musicians, film directors, artists, and—yes—psychiatrists than for financial professionals."

Does he not realize that those financial professionals are also the wealthy patrons that support all those arts? If they go, or get a lot poorer, the artists go. Look at history: artistic creatives follow the money, and are not wealth generators themselves. They are an effect, not a cause.

As a preamble to calls for more dense, urban living, he calls for a shift from homeownership to renting:

"As homeownership rates have risen, our society has become less nimble: in the 1950s and 1960s, Americans were nearly twice as likely to move in a given year as they are today. Last year fewer Americans moved, as a percentage of the population, than in any year since the Census Bureau started tracking address changes, in the late 1940s. This sort of creeping rigidity in the labor market is a bad sign for the economy, particularly in a time when businesses, industries, and regions are rising and falling quickly."

I think this is a misreading of what's happening. As a society, we've moved up Maslow's Hierarchy of Needs over the last 50 years. As we've satisfied our economic and material needs, social needs have become more important, and people are simply less willing to break those geographic ties to friends and family for a slightly better job. Evidence of this can be seen in college applications, where teenagers are now much more interested in staying closer to home and parents, rather than trying to get as far away from them as possible. I think it's a healthy sign of more mature priorities than the old climb-the-salary-ladder-at-all-costs approach.

"(The economy) no longer revolves around simply making and moving things. Instead, it depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required."

It's amusing that the entire essay calls for breaking from the past and moving forward, then at the end he suddenly lurches backward to the past calling for more density, rail transit, and walking with fewer cars. We agree that growth is all about people making lots of connections quickly, but he thinks that means people physically stacked on top of each other. In a world built around walking as the primary mobility mode, he - and Jane Jacobs - are right: it's all about physical proximity and density. Speed is fixed and slow, so density needs to be maximized. But as I've pointed out before, we have become a wealthy and technologically advanced society where the car is the primary mobility mode. Speed is now variable and potentially fast, while density is more limited (because of the need to accommodate roads and parking). Keeping up the same, or even faster, velocity of connections means keeping up speeds - and that means high-speed freeways and arterials with adequate capacity and with minimal traffic congestion. See this post for a detailed comparative analysis of how these two approaches play out in Manhattan and Houston.

The personal vehicle, whatever its propulsion technology, is now a permanent part of society. Accept it, and optimize your cities around it to maximize the velocity of connections (note that this does not preclude pedestrian-oriented villages within a broader car-driven regional urban area). Any other strategy has about as much chance of success as the Midwest does of reclaiming manufacturing from Asia...

Thursday, April 23, 2009

The four Houstons

I was thinking recently about how metro areas fragment as they grow. They stop being one unified city, and instead are an assembly of overlapping urban clusters where people tend to live and work within the same zone. Here's the main indicator: can most people reasonably commute to all or most of the jobs in the metro, or are there some areas that are essentially off-limits because of the extreme commute? Austin and San Antonio are still pretty much single cities. DFW is has grown beyond that point. You don't want to live in Frisco or Plano and work in Fort Worth. But where is Houston? Are we developing our own Ft. Worth equivalents?

I can see Houston fragmenting into four different clusters, based on both geography and industry.

The first, and main one, is roughly the triangle from Downtown to the Energy Corridor to Sugar Land. This is home to the vast majority of jobs, wealth, and amenities in Houston, including most of the dominant energy industry, as well as the world's largest medical center. West Houston has its own chamber of commerce.

The second one is not that far from the first, but distinctly different: the industrial east side along the ship channel, including Pasadena and Baytown, and home of the port, refining, and chemical industries.

The third one can trace itself back to the 60's, probably one of the earlier "edge cities" in America: Clear Lake and NASA. Well, that's the focus, but it's part of a larger coastal urban region that includes Galveston County, Friendswood, League City, Texas City, and Kemah (among others). NASA is probably the 'downtown/central business district' of this region, although Galveston might put up an argument there - almost their own little D-FW polarity. They also have their own chamber of commerce, Bay Area Houston.

You can probably guess where I'm headed with the fourth and last one: North Houston, focused on The Woodlands. I'd include Kingwood, Humble, IAH, Spring, Greenspoint, 1960, HP/Compaq, and Tomball in this zone. Originally this area was clearly a suburb of commuters headed into central Houston every day. It was the hot suburb when I moved there as a teenager in the early 80s. But I think The Woodlands has given it a new 'downtown', and increasingly people seem to both live and work out there rather than come into central Houston. Eventually I see this region focused on The Woodlands becoming our own Fort Worth, especially once the north side of the Grand Parkway gets built to unify the region with its own east-west freeway (well, in addition to 1960 and the north Beltway). The aerotropolis that evolves around IAH will also be a driver here.

Monday, April 20, 2009

Topping the F500, skyline, polls, regs, good PR, and a piracy solution

The smaller misc items continue to pile up rapidly. One of the more interesting ones is the 2009 Fortune 500 list (Chronicle story), where Texas pulled away from NY (56) and CA (51) with 64 headquarters, 29 of which are in the Houston metro (up from 26 last year). Houston stays as the #2 city with 27 inside the city limits, after NYC (43) but ahead of Dallas (14), Atlanta (9), and Chicago (9). Our 29 are more than 46 states (!), behind only TX, NY, CA, and Illinois. 10 of Texas' 64 are not DFW or Houston, so that leaves 25 for DFW. The bad news is that this may be a local peak for us, as the crash to $50 oil may drop some of our companies out of the 2010 F500. Another frustration: two of the Fortune 10 that should have their HQs here along with the thousands of their employees that are already here - but don't: Exxon (DFW, #1) and Chevron (SF Bay Area, CA, #3).

Moving on:

Houston makes the Forbes Traveler list of the world's most stunning skylines. Hat tip to HAIF.

Great post at Keep Houston Houston: imagine if old Manhattan had used "neighborhood preservation" regulations to strictly preserve its original rural, low density character. "Capital of the World" it would not be.

A Londoner is wowed by the good life in Houston: "Let's all move to Houston." Who says we don't have world-class quality of life? Hat tip to Anthony.

Finally, in a completely off-the-wall segment having nothing to do with Houston, my cheap technology solution to Somali piracy: small but fast torpedoes that home in on propeller noises and disable them with either a very tiny explosive or with some sort of tangle net. Every ship could carry several of them and just pitch them over the side when needed, probably with some sort of encrypted signal so they don't home in on the mother ship's propeller, and with a sink or self-destruct mechanism if they run out of fuel or time without finding their target (or maybe connect them by wire to the mother ship - even put them out for tow just in case when in dangerous waters). No deaths or messy gun fights - just a bunch of pirates sitting in boats going nowhere and waiting for the authorities to pick them up.

Or there's always Somali nation-building, which has worked so well in the past...

Thursday, April 16, 2009

Best cities for jobs: Texas runs the table

The annual best cities for jobs ranking was released this week at Forbes, and Texas ran the table with the top 5 slots on the large city list: Austin, Houston, San Antonio, Ft. Worth, and Dallas. That's pretty impressive when you think about it. Still, everybody is hurting now, we're just hurting less than elsewhere. Excerpts:

The top of the complete ranking--which, for ease, we have broken down into the two smaller lists, of the best big and small cities for jobs--is dominated by one state: Texas. The Lone Star State may have lost a powerful advocate in Washington, but it's home to a remarkable eight of the top 20 cities on our list--including No. 1-ranked Odessa, a small city in the state's northwestern region. Further, the top five large metropolitan areas for job growth--Austin, Houston, San Antonio, Ft. Worth and Dallas--are all in Texas' "urban triangle."

The reasons for the state's relative success are varied. A healthy energy industry is certainly one cause. Many Texas high-fliers, including Odessa, Longview, Dallas and Houston, are home to energy companies that employ hordes of people--and usually at fairly high salaries for both blue- and white-collar workers. In some places, these spurts represent a huge reversal from the late 1990s. Take Odessa's remarkable 5.5% job growth in 2008, which followed a period of growth well under 1% from 1998 to 2002.

...

Looking at the energy sector's hotbeds, however, doesn't tell the whole story. Another major factor behind a city's job offerings is how severely it experienced the housing crisis. There's a "zone of sanity" across the middle of the country, including Kansas City, Mo., that largely avoided the real estate bubble and the subsequent foreclosure crisis.

Still other factors correlating with job growth--as evidenced by Shires' and my current and past studies--are lower costs and taxes. ... Compared with high-tech centers in California and the Northeast, such as San José and Boston, places like Austin offer both tax and housing-cost bargains, as do Fargo, N.D. and Durham-Chapel Hill, N.C.

...

Specifically, the college town winners include not only well-known places like Austin and Chapel Hill, but also less-hyped places like Athens, Ga., home of the University of Georgia; College Station, Texas, where 48,000-student Texas A&M University is located; Morgantown, W.Va., site of the University of West Virginia; and Fargo, the hub of North Dakota State University.

Monday, April 13, 2009

Radically increasing IAH express bus ridership and revenue

As I mentioned last week (first item), ridership on Metro's spiffy new IAH express bus service has been a little anemic, averaging only 1 or 2 people per bus trip. But I think there's a way that could be substantially improved. Continental represents the vast majority (~85%) of the traffic at IAH. Their web site already allows passengers to prepay for checked luggage, rent cars, and hotels. Why couldn't it also offer pre-paid express bus tickets when somebody buys a plane ticket either starting or ending in Houston? That's the time to grab people. Not only does Continental already have their credit card at that point, making the transaction easy, there's also the opportunity to really sell the value of the express bus right there on the web page:

Point out the speed, including access to the HOV lane to avoid traffic congestion.

Show small pictures of the interior and exterior of these luxury coaches, as well as the luggage service, so potential riders know they won't be stuck schlepping their luggage on a normal city bus.

Compare vs. the cost of taxi, both to go downtown and even for other trips where they have to connect to light rail or a taxi downtown. I'd do this with a small map and two sets of numbers at each major core destination: the taxi cost (in red) vs. the bus cost (in blue or green) for Downtown, bus+LRT for TMC or Rice, or bus+taxi for UH, Greenway Plaza or Uptown (realistically, few will connect to local buses after they get downtown, although I suppose that option could also be priced into the map). Also mention the $6 cab fares for within downtown.

Of course, for Continental to have an incentive to do this, they'll need a cut of each ticket sold. And to incentivize pre-payment, there might also need to be a discount vs. the walk-up price. Maybe the walk-up stays $15 one-way while the web site advance price is $12, of which Continental keeps $2-3 dollars. That might not sound like a lot of incentive for Continental, but you'd be amazed how thin the profit margins are on the average plane ticket. Even a couple-dollar boost is significant, especially since it costs Continental absolutely nothing to provide the service. And even with the discount and margin for Continental, Metro would vastly increase the number of riders and overall revenue from the service, which, in the long-term, will be critical to keeping it.

Let's talk about the really big picture - like 200+ years of American history. It seems to me there have been four great growth waves in our history. In each case, there was an attractive new frontier, which not only drew migrating waves of people seeking new opportunity, but also developed large new bases of industry, wealth, and power.

The Boston, NYC, Philadelphia, Baltimore, DC corridor: America's original land of opportunity, wealth, and power. NYC was the big winner, and DC and Boston still do quite well.

The rise of the agricultural and industrial Midwest, including Chicago, Detroit, Pittsburgh, Cleveland, and St. Louis. The fall here has been a hard one as manufacturing moved abroad, but Chicago still stands as a world class city produced during the region's heyday.

The great westward migration, mostly focused on California, but with ancillary growth in adjacent and west coast states. This migration started well before WW2, but really took off after the war, and produced two top-tier mega-metros, LA and the San Francisco Bay Area, and several successful second-tiers like Seattle, San Diego, Las Vegas, and Phoenix.

These waves are not clearly distinct, but overlap each other. As one region starts to level off, the next region is beginning its growth wave. And that's the situation now as California shows clear signs of leveling off: gigantic tech and housing crashes plus economic and domestic outmigration as tax, cost-of-living, housing, and regulation burdens rise.

The fourth wave is increasingly clear: Texas and the new South.

Just as CA had its pre-war growth surge, Texas had its first real growth waves with the 20th century post-Spindletop oil boom. They had the dust bowl migration of the 30s, and we had the oil boom of the 70s. But the real mega-surge has become more clear in the new century as CA hands off the baton to Texas. This growth wave really covers much of the South, but Texas is the 800lb gorilla vs. states like Georgia and North Carolina, just as California dominates over Washington, Nevada, and Arizona. I would argue we even loom over Florida, which certainly has experienced incredible population growth (now the #4 state), but has had disproportionately less success with building industry, wealth, and power (I'm not counting people who built wealth elsewhere but bought a FL second home), including few Fortune 500 headquarters, making it similar in some ways to Arizona.

When you look at it this way, it's clear Texas will be the focal point of America's growth for at least the next few decades. History also says at least one, and possibly more, truly top-tier world cities will emerge from this wave (and there's a good case to be made that we're already there). It's easy to get caught up in the day-to-day hubub and crisis-of-the-moment, but take a minute to stand back and see the big picture. You're part of a great historical wave that's just starting to really take off, the same as being in Chicago at the turn of the century or in California after WW2. Pretty cool, eh?

One thing hasn’t changed in this recession: Those who are mobile will continue to move where jobs are relatively plentiful and housing is cheaper.

The winners continue to be southeastern states and Texas. Some 67,000 single- and multifamily building permits were issued in the southern region in the first three months of this year, according to the U.S. Census Bureau.

Texas alone accounted for more than 20,000 authorizations. Hot spots are still Houston, Dallas-Fort Worth and Austin.

Considering that almost 120,000 permits in the entire country were issued during that period, it shows that more than half of all new construction is in the South, where the cost of housing and living is significantly lower than in the Northeast, Midwest and on the West Coast. In contrast, just 5,571 units were approved in New York and New Jersey combined.

Monday, April 06, 2009

IAH bus, LRT, alt energy, TX vs CA, Houston hooky contest

Clearing out some smaller misc items:

After 7 months, Metro still has pretty disappointing ridership on its IAH airport express buses: 98 total per day, or 1-2 per bus trip (!). That sparked quite a debate on HAIF here. The month-to-month growth rate is good, and I think they need to give it more time to develop (and maybe better promotion at the airport, and a price cut wouldn't hurt), but it certainly makes you pause at the wisdom of a billion$+ investment to extend the north line LRT to IAH after 2012 - which, btw, would be a slower ride than the bus if it includes stops along the way. Reasons why rail to the airport usually doesn't make sense in my older posts here (3rd bullet point) and here (last bullet point).

"Do the math: Light rail costs 14 to 35 times as much to move people as highways.

The Government Accountability Office found that bus-rapid transit—frequent buses with limited stops—provided faster, better service at 2 percent of the capital cost and lower operating costs than light rail."

It backs up my assertion that light rail is not a logical transportation investment (other than to grab rail-siloed federal funds) - it's an amenity we choose to build just because we want to, just like stadiums, parks, and libraries.

Some more evidence that Houston is broadening its role as energy capital to include alternative technologies: Tessera Solar is headquartered right here in Houston. The talent they need to recruit is here. And an interesting side note: they felt a downtown location was better for attracting talent than in The Woodlands. Hat tip to Jenny.

And another item that we're doing well on energy efficiency too: the EPA just rated Houston #3 in the country for energy star qualified buildings (number, sq.ft. and $ savings), #1 when you look at emissions savings. Hat tip to Peter.

Anyway, I wanted to let you know that we're having a contest on nextstop.com for Houston recommendations (because we believe there are other places just as interesting as San Fran!). Winner gets a $100 visa gift card. These are the details:

Let's say you decided to play hookey around Houston - you're ditching school or that 9-5 job for a single day. What would you do? Where would you go? Create a guide for your day off in and around Houston, Texas. If your guide receives the most votes from other nextstoppers, we'll send you a $100 VISA gift card to help you make that day a reality. (We won't tell your boss, we promise)

I'm sure some of my readers out there could put together a great itinerary...

Thursday, April 02, 2009

Winter 1Q09 Highlights

It's time for the Winter 1Q09 quarterly highlights post. These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument.

Don't forget we offer an email option for the roughly twice/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link (Atom) (or RSS 2.0) is also available. As always, thanks for your readership.

About Me

Social Systems Architect and entrepreneur with a genuine love of my hometown. I cover a wide range of topics in this blog - including transportation, transit, economic development, quality-of-life, city identity, and development and land-use regulations - and have published numerous Houston Chronicle op-eds on these topics. I'm a Founding Senior Fellow with the Center for Opportunity Urbanism and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. I am a native Houstonian, 6th-generation Texan, attended Rice University for my BSEE and MBA, and a former McKinsey consultant and adjunct faculty member with Leadership Houston. I am currently the founder of Coached Schooling, pioneering a transformational new approach for a more effective and engaging 21st-century K-12 education combining the best elements of eLearning, home and traditional schooling. CONTACT EMAIL: tgattis (at) pdq.net - send me an email if you would like to receive these posts via email, or see the Google Groups signup box below.